WHAT IS FDI ?FOREIGN DIRECT INVESTMENT (FDI) isdirect investment by a company inproduction located in another countryeither by buying a company in the countryor by expanding operations of an existingbusiness in the country.
FDI IN INDIA•India is the second most important fdidestination (after CHINA) for transnationalcorporations during 2010 – 2012.• sectors which attracted higher inflows whereservices , telecommunications,constructionactivities and computer software and hardware.• Mauritius,Singapore,the US and the UK wereamong the leading sources of FDI.
• FDI in india in 2010 was $44.8 billion and in 2011 ,it increases by 25 % to $ 50.8 billion and now it increases by $ 1.93 billion by the year 2012• Recently,Government of India allowed FDI ;in aviation upto 49%,in broadcast sector upto 74%,in multi-brand retail upto 51% and single- brand retail upto 100%.
FORMS OF FDI IN INDIAN RETAILING• JOINT VENTURES• FRANCHISING• SOURCING OF SUPPLIES FROM SMALL SCALE SECTOR• CASH AND CARRY OPERATIONS• NON-STORE FORMATS
POSITIVE FEATURES OF FDI• Job opportunities in areas like marketing ,agro- processing,packaging,transportation etc will be created.• Farmers will get a good price for their crops and their exploitation will stop.• Infrastructure facilities,refrigeration technology ,transportation etc will be renovated.• Foreign companies will also create a supply chain in the Indian market .
NEGATIVE FEATURES OF FDI• Small retailers and other small ‘kirana store owners ‘will suffer a large loss.• Giant retailers will displace small retailers• Foreign giants will purchase their goods from the international market and not from domestic sources.• Affect will be on consumers , retailers , wholesalers.
CONCLUSION• At the first sight we can see that benefits are more in numbers ,but i think determinents are more serious.• In India we have 11 shops per 1000 people,India has 1.2 crore shops ,which gives employment to about 4 crore people, where they will be go if the FDI will increase in retail sectors.
• But Govt of india is saying that FDI in the retail sector is likely to create as many as 10 million jobs in a span of 10 years,making it the largest sector in organised employment.